In a new achievement added to the series of successes for Kuwait Finance House group (KFH-Group) in leading the Islamic banking industry, KFH volume traded in the sukuk market exceeded USD 16 billion in 2021, which consolidates the leadership of KFH in the sukuk markets as a major trader and market maker at the regional and global levels.
General Manager Treasury at KFH, Ahmed Essa Al-Sumait, said that this trading volume confirms the great role played by KFH in activating the sukuk market, while reflecting the bank's strong financial position and its prestigious position globally as a reference for Islamic banking and a pioneer in the Islamic finance industry globally.
Al-Sumait added in a press release, that KFH managed to acquire a significant share of the secondary market trading in sukuk in 2021, where some transactions exceeded USD 200 million, pointing out that these transactions contribute to enhancing liquidity and supporting Islamic financial markets.
Al-Sumait said that KFH was able to achieve a great spread and remarkable development in 2021, due to its leadership in the sukuk market, as several Islamic and conventional financial institutions were stimulated to enter the market and participate in trading. He pointed out that the volume of sukuk trading came as a result of several factors, including sovereign issuances in the (GCC) countries to gap the budget deficit as a result of the drop in oil prices, as well as the low profit rates that made the issuance opportunities for institutions and banks attractive. The most prominent of these issuances is the government of KSA with a volume of USD 2 billion, where KFH was a market maker for this sovereign issuance. Saudi Aramco also issued the first sukuk issuance amounting to USD 6 billion, where "KFH Capital" was one of the arrangers of the deal, while KFH played a prominent role as a market maker after the issue.
Al-Sumait noted the growth in the demand for investment in sukuk by high-net-worth individual customers, in the primary market or the secondary market, came as a result of the good returns and low risks, which was reflected in the volume of trading. Al-Sumait mentioned that the Mudaraba sukuk for the first tranche of the capital, worth USD 750 million, issued by KFH, is one of the most prominent issuances that witnessed great demand from individual customers.
Al-Sumait also added that KFH's geographical spread in Turkey, Malaysia, Bahrain and KSA, which are all considered among the leading countries in sukuk issuance, plays a major role in meeting customers' requirements and contributes to enhancing trading operations.
It is worth noting that KFH was ranked as the top primary dealer in the IILM sukuk program. Also, KFH achieved the top rank dealer in the secondary market in 2021. It is an unprecedented event that a financial institution occupies the top rank dealer for the IILM Sukuk Program in both primary and secondary markets.